You get 50-year mortgages after voting for deporting foreigners, shoring up domestic manufacturing, ending foreign wars and controlling spending

[unknown]

WTF, lol.

 

[unknown]

 

[unknown]

 

[unknown]

 

[unknown]

 

[acptulsa]

 

[Invisible Man]

So this might be a dumb question. But what are the actual policies Trump is proposing that will ostensibly normalize 50-year mortgages? Has he even given any specifics?

Is it actually illegal to have a 50-year mortgage now? Or just disincentivized?

I imagine that in current law there are various interventions in the market by the federal government that incentivize 30-year mortgages, like only allowing mortgage interest to be deducted from federal income taxes for mortgages of no longer than that. But there must be more than just that. What other things are there?

What I'm getting at is, are the changes that Trump supports just deregulation? Or are they a form of corporate welfare that will reward banks for issue 50-year mortgages (e.g. providing federal guarantees for the loans at the expense of taxpayers)?

 

[unknown]

"The White House is furious with Bill Pulte for convincing President Trump to propose a 50-year mortgage plan.

Pulte, the Federal Housing Finance Agency director, presented a 3-by-5 poster board at President Donald Trump’s Palm Beach Golf Club.

It showed former President Franklin Roosevelt under “30-year mortgage” and Trump under “50-year mortgage,” with the headline “Great American Presidents.”

A person near the situation said, “[Pulte] just sold POTUS a bill of goods that wasn’t necessarily accurate.

[Pulte] said, ‘FDR did it, you can do it, it’s gonna be a big thing.’ But he didn’t tell him about all the unintended consequences.”

“Anything that goes before POTUS needs to be vetted,” said the person present for Pulte’s poster presentation. “And a lot of times with Pulte they’re not. He just goes straight up to POTUS.”

 

[Invisible Man]

"The White House is furious with Bill Pulte for convincing President Trump to propose a 50-year mortgage plan.

"The White House" meaning whom? How can Trump be mad at someone for convincing Trump to propose something that Trump likes? Did Trump change his mind? Or does "the White House" here refer to someone else?

 

[Invisible Man]

Other loans are not front loaded in that manner.

Car loans for instance.

In your example, the $394,258.58 should be paid in equal amounts of combined principal and interest from day one.

The reason the front loading isn't as apparent with car loans is just because of their shorter terms. But Clayton is right, if you pay off a loan with equal payments spread out over time, then it's mathematically required that the earlier payments go more to interest and the later payments go more to principle. That's not due to any legislative requirement or special terms of the loan written into the contract. It's mathematically impossible to be otherwise.

 

[Invisible Man]

So this might be a dumb question. But what are the actual policies Trump is proposing that will ostensibly normalize 50-year mortgages? Has he even given any specifics?

Is it actually illegal to have a 50-year mortgage now? Or just disincentivized?

I imagine that in current law there are various interventions in the market by the federal government that incentivize 30-year mortgages, like only allowing mortgage interest to be deducted from federal income taxes for mortgages of no longer than that. But there must be more than just that. What other things are there?

What I'm getting at is, are the changes that Trump supports just deregulation? Or are they a form of corporate welfare that will reward banks for issue 50-year mortgages (e.g. providing federal guarantees for the loans at the expense of taxpayers)?

After I let myself get baited into another pig wrestling match, this post got buried.

Seriously though, does anybody know the answer to this?

 

[acptulsa]

"The White House" meaning whom? How can Trump be mad at someone for convincing Trump to propose something that Trump likes? Did Trump change his mind? Or does "the White House" here refer to someone else?

The building itself is mad. The house is like, the British burned me before I was anywhere near that old, and if I hadn't been paid for the owner would have let the bank take me and the bank would have torn me down and sold my lot. It doesn't want other houses to suffer that fate.

Either that, or Trump's a puppet.

 

[acptulsa]

...it's mathematically required that the earlier payments go more to interest and the later payments go more to principle. That's not due to any legislative requirement or special terms of the loan written into the contract. It's mathematically impossible to be otherwise.

I'd love to hear an explanation of that, because the interest hasn't even accrued yet. Interest is compounded. You don't borrow the interest, you borrow the principal, so you pay interest on the principal. How does mathematics require that you pay something you don't even owe just yet? Isn't that akin to paying a fine for a crime you haven't committed?

 

[Invisible Man]

I'd love to hear an explanation of that, because the interest hasn't even accrued yet. Interest is compounded. You don't borrow the interest, you borrow the principal, so you pay interest on the principal. How does mathematics require that you pay something you don't even owe just yet? Isn't that akin to paying a fine for a crime you haven't committed?

The terms of how the interest accrues is part of the agreement. If there is a provision that there is no interest for the first x number of months, then you're right for those months. A car loan may have that as an incentive to get people to take out loans, but when they do that, they come with other strings attached that are no less predatory.

But if you just have the simplest case of a loan with a set interest rate that just stays constant from the moment you take out the loan until the moment you have paid it all off without any special provision like that, then what I said holds.

Consider a case of a $100,000 loan with a 10% annual interest rate, and to keep it simple, we'll say that interest rate is compounded annually. If you pay $10,000 per year, you will never pay off the loan, you'll just be paying interest forever with the principle staying at $100,000.

If you pay $15,000 per year, then it will work as follows:
On the day you take out the loan, you owe $100,000 in principle and $0 in interest.
One year later, you owe $110,000 and pay $15,000, which leaves you owing $95,000, meaning you paid $10,000 toward the interest and $5,000 toward the principle.
One year later, you owe $104,500 (=$95,000+$9,500), and pay $15,000, meaning you paid $9,500 toward the interest and $5,500 toward the principle.
One year later, you owe $98,450 (=$89,500+$8,950), and pay $15,000, meaning you paid $8,950 toward the interest and $6,050 toward the principle.

And so on.

You still could pay off the loan with payments that follow a rule of half going to interest and half going to principle, but that would require the first year's payment to be $20,000, and then the next year's to be $18,000, and then $16,400, and so on. It wouldn't be the same payment every time.

 

[TheCount]

 

[Anti Federalist]

The reason the front loading isn't as apparent with car loans is just because of their shorter terms. But Clayton is right, if you pay off a loan with equal payments spread out over time, then it's mathematically required that the earlier payments go more to interest and the later payments go more to principle. That's not due to any legislative requirement or special terms of the loan written into the contract. It's mathematically impossible to be otherwise.

It's not a question of shorter terms, I'm talking about simple interest loans.

What Is a Simple Interest Loan? (2025) | ConsumerAffairs®

Learn if a simple interest loan is the right type of loan for your needs

www.consumeraffairs.com

In other words, the type of loans offered by Bailey Bros. Building and Loan, before the government got it's stinking nose involved.

A Brief History Of Mortgage Financing In The United States

At the most basic level, a mortgage is a long-term consumer loan taken for the purpose of eventually paying off the loan and owning a house and the land it sits on.

www.forbes.com

 

[acptulsa]

The terms of how the interest accrues is part of the agreement.

Exactly. That's not mathematical. That's contractual. There's nothing in the way numbers work in the universe that requires it. It's just how bankers roll.

 

[Invisible Man]

It's not a question of shorter terms, I'm talking about simple interest loans.

What Is a Simple Interest Loan? (2025) | ConsumerAffairs®

Learn if a simple interest loan is the right type of loan for your needs

www.consumeraffairs.com

In other words, the type of loans offered by Bailey Bros. Building and Loan, before the government got it's stinking nose involved.

A Brief History Of Mortgage Financing In The United States

At the most basic level, a mortgage is a long-term consumer loan taken for the purpose of eventually paying off the loan and owning a house and the land it sits on.

www.forbes.com

With simple interest loans, where the interest stays the same, and you pay them off with equal payments per whatever payment period, then it is mathematically required that the earlier payments be more weighted to interest and the later ones weighted to principle.

 

[Anti Federalist]

With simple interest loans, where the interest stays the same, and you pay them off with equal payments per whatever payment period, then it is mathematically required that the earlier payments be more weighted to interest and the later ones weighted to principle.

Why?

Not being snarky, seriously, why?

For the ease of math, lets say you took out $150000 loan at 4 percent over 30 year (360 months)

That would create a lending fee (interest) of $106244 over the life of the loan.

106244 / 360 = $295

Principal payments would be 150000 / 360 = $416.

For total payment each of month of an equal portion of the total loan principal and the interest of $711.

This is my understanding of a simple, non-compound interest mortgage.

And also what I have understood as what was normally offered by small town building and loans prior to the feds getting involved.

Now, other than the banksters wanting their cut first, so as to make a maximum profit in the event of foreclosure or default, why is it mathematically required for interest to be paid up front, instead of equally paid along with principal every month, thus building equity quicker for the owner of the property?

Nobody else gets this courtesy. If I purchased $150000 in 30 year CDs, let's say, and cashed them in before maturity, I would not get front loaded interest paid to me.

 

[ClaytonB]

I'd love to hear an explanation of that, because the interest hasn't even accrued yet. Interest is compounded. You don't borrow the interest, you borrow the principal, so you pay interest on the principal. How does mathematics require that you pay something you don't even owe just yet? Isn't that akin to paying a fine for a crime you haven't committed?

This is how compound interest works.

With simple interest, you can schedule the interest any way you want. You could front-load it, back-load it or spread it out, or any combination. But compound interest is calculated continuously, meaning, the compounding is occurring at "every second" of the loan's existence. It's just algebra (you can also solve it with Calculus, if you want).

In compounding, the interest is always a fixed proportion of the principal, divided by the time interval you're calculating over. We can calculate how much interest you owe for each year, each day, each hour, or each millisecond of the loan (ad nauseum). This is why mathematicians (and scam-artists) love compounding. It's fun to calculate if you're wired that way. Simple interest is boring -- it's a single multiplication, and then the fun's over. Compounding is used because the idea behind it is alternative uses of money over time. That is, if I am a creditor and you are a borrower, and you offer me 5% today, but somebody else offers me 10% tomorrow, I should choose the 10% tomorrow, because the total yield will be better. And if you finely chop that up for every single second of time, and every 0.001% of interest, etc. then you basically get compounding, also sometimes called the time-value of money (present-value vs. future-value of money). Since that's the underlying mathematics of what is happening, the banks then shoehorn everybody onto this system, even though it's objectively absurd to write contracts this way. Under compounding, interest can accrue forever, which is why I think that compounding interest is actually unlawful, because every debt is actually an infinite debt, unless and until it is paid off. Even a 1 penny loan eventually becomes infinite under compounding. Of course, the greedy bastards who run our monetary "system" love that... for them, "infinite debt" is synonymous with "orgasm".

Anyway, the interest is mathematically largest up-front because the outstanding principal is largest up-front. If you owe $1,000 with 10% interest annually, the first year's interest will be $100. Assuming you pay $200 ($100 on interest, $100 on principal) in the first year, the next year you owe $900, still at 10% interest, so your interest owed is $90. Assuming you pay $190 that year ($100 on principal, $90 on interest), then next year you will owe $800 principal, and $80 interest, etc. until the loan is paid off. So, the schedule of interest payments will go $100, $90, $80, and so on. That's just how compounding works, there's no way around it.